Around 8 million sq. ft of additional office space leased in the first six months

The biggest chunk of the leasing took place in Bengaluru and Delhi-NCR. Photo: iStock

Mumbai: Despite a slowdown in the residential property market, India’s commercial office space saw a pick-up in demand in the first half of 2018, with around 54% growth in the absorption of office space.

According to a report titled India’s Real Estate Milestones – A 20 year narrative by the Confederation of Indian Industry (CII) and property consultancy JLL India, around 8 million sq. ft of additional office space was leased in the first six months, compared with the year-ago period. Total office leased during the period stands at 24 million sq. ft across seven top cities, including Mumbai, Bengaluru, and Delhi-National Capital Region (NCR).

The biggest chunk of leasing took place in Bengaluru and Delhi-NCR, with a 26% share each in gross leasing volumes during the period. The report also said office space absorption will further pick up, touching around 30 million sq. ft by the year end. By 2019, it would see a net absorption of 33.5 million sq. ft.

Institutional investors pumped in around $3.6 billion into sector in the first half of 2018, with a major chunk of it going into commercial office space and retail sectors, the report said. The first half of the year also saw a 25% rise, compared with the year-ago period. “This can be attributed to two large factors, firstly returning buyers’ confidence on account of implementation of RERA in most states, and stable capital values that have started to show an upward trend.”

“All aspects of the sector, residential, retail, office and investments, have seen healthy increase in demand. What we note specifically is that the quantum of the rise,” said Ramesh Nair, country head and chief executive officer (CEO) , JLL India.